Chapter 4
‘Tax cuts expected in today's budget’
Link:
http://www.canada.com/theprovince/news/money/story.html?id=36b8c5ab-da6f-427e-a4f7-833209e4c6d4&k=11768
Summary
Like the title says, tax cuts are expected. The Finance Minister of Canada, James Flaherty, made several promises regarding the taxes families have to pay, saying that they, the families, are bearing an excessive tax burden. As well as promising “significant tax cuts in budget” he also promised “substantial” increase spending on Canada’s military. The new spending on the military budge will include $ 2 billion for three icebreakers and a deep-sea port, which will be used in the north of Canada. They want to let their presence be known, to more strongly show their claim on Arctic. Government spending will not only be bigger on military but also used to pay for some promises made by the previous Liberal government. This includes $ 500 million for West Coasts ports and transportation facilities improvements. "The GST and the child care and all these other tax cuts are going to cost a lot," said a senior Conservative source, "but they've also made a lot of spending commitments and they said to me it's going to be the biggest budget in a long time in terms of spending priorities." The GST was reduced by 1 per cent form seven to six per cent, and families were given $ 1, 2000 a year per child under six, for child-care payments. Taxes for businesses were also promised to be cut. Douglas Porter, an economist of BMO Nesbitt Burns, said the higher energy prices and higher borrowing costs would be easier for consumers to deal with, it will also put upward pressure on interest rates, increasing the borrowing costs.
Relationship to Ch. 4 – Government in Canada
Canada is the only G7 country that has a surplus for their previous fiscal years. Even though they had a surplus for that year, they still do have a national debt, which is about 500 billion dollars. It is necessary to lower the tax rate, since it is shown that many families must spend about half of their income on taxes, but that will greatly affect the Canada’s revenue from the taxes. Not only are they reducing taxes on the population, but they are increasing spending. It doesn’t really make that much sense to do both at the same time, spending more carelessly as well as lowering taxes. It is even more strange that the government promised “drastic” changes to spending and to the tax cuts. I don’t really think its that important to spend $2billion on the North, seeing as only a fraction of our population lives up there. Instead of spending more, I think we should apply the surplus to the national debt, which we are constantly losing money from interest on it.
‘Tax cuts expected in today's budget’
Link:
http://www.canada.com/theprovince/news/money/story.html?id=36b8c5ab-da6f-427e-a4f7-833209e4c6d4&k=11768
Summary
Like the title says, tax cuts are expected. The Finance Minister of Canada, James Flaherty, made several promises regarding the taxes families have to pay, saying that they, the families, are bearing an excessive tax burden. As well as promising “significant tax cuts in budget” he also promised “substantial” increase spending on Canada’s military. The new spending on the military budge will include $ 2 billion for three icebreakers and a deep-sea port, which will be used in the north of Canada. They want to let their presence be known, to more strongly show their claim on Arctic. Government spending will not only be bigger on military but also used to pay for some promises made by the previous Liberal government. This includes $ 500 million for West Coasts ports and transportation facilities improvements. "The GST and the child care and all these other tax cuts are going to cost a lot," said a senior Conservative source, "but they've also made a lot of spending commitments and they said to me it's going to be the biggest budget in a long time in terms of spending priorities." The GST was reduced by 1 per cent form seven to six per cent, and families were given $ 1, 2000 a year per child under six, for child-care payments. Taxes for businesses were also promised to be cut. Douglas Porter, an economist of BMO Nesbitt Burns, said the higher energy prices and higher borrowing costs would be easier for consumers to deal with, it will also put upward pressure on interest rates, increasing the borrowing costs.
Relationship to Ch. 4 – Government in Canada
Canada is the only G7 country that has a surplus for their previous fiscal years. Even though they had a surplus for that year, they still do have a national debt, which is about 500 billion dollars. It is necessary to lower the tax rate, since it is shown that many families must spend about half of their income on taxes, but that will greatly affect the Canada’s revenue from the taxes. Not only are they reducing taxes on the population, but they are increasing spending. It doesn’t really make that much sense to do both at the same time, spending more carelessly as well as lowering taxes. It is even more strange that the government promised “drastic” changes to spending and to the tax cuts. I don’t really think its that important to spend $2billion on the North, seeing as only a fraction of our population lives up there. Instead of spending more, I think we should apply the surplus to the national debt, which we are constantly losing money from interest on it.
posted by Victor Duong at 5:25 PM
1 Comments:
Tax cuts is great news to many Canadian families as they would have more money to spend on other things, but a more important aspect of tax cuts is this will stimulate the economy. In order for the economy to grow, it is necessary to increase people’s spending power. Tax cuts will provide extra money for families to spend and this will certainly benefit the economy. I agree that it is not such a great idea to spend $2 billion on ice breakers and deep-sea ports as there is a limited population there. The GST reduction of 1% would be welcomed and this will also encourage people to spend more.
T.King
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